Category: Peru

Ismael Benavides, a former minister and banker, has been appointed Peru’s new agriculture minister replacing Juan José Salazar who resigned earlier this month. Benavides was fisheries minister in the 1980s and was chief executive of Banco Internacional del Peru for more than 10 years.

Mapfre Peru, an affiliate of Spanish insurance group Mapfre, has paid around $14.5m for control of local insurer Latina Seguros y Reaseguros, the parent company announced Wednesday. The acquisition will give the Peruvian affiliate a 10% market share, the company said, and make it the country’s third-largest insurer.

Peru moved closer to restoring a bicameral system of government after a Congressional committee approved legislative reform that could lead to the creation of an upper house, or Senate, by 2011. Peru has had a single chamber system since 1992 when then-president Alberto Fujimori dissolved Congress and established a single-Chamber system under the new 1993 Constitution. The proposed upper house will contain 50 members, compared with the 120 legislators, and will have a national constituency. The reform has yet to be approved by Congress as its unlikely to be popular with the public, say analysts.

The International Monetary Fund has praised Peru’s economic performance and offered a vote of confidence in President Alan García’s second attempt to run the Andean nation after disastrous consequences the first time around. “The authorities’ program is yielding significant dividends,” said the Fund. The comments came after a mission to the country to carry out the first review under its 25-month Standby Arrangement. Meanwhile, figures released Tuesday by the national statistics bureau INEI show that GDP expanded by 5.9% in March, compared with the same month in 2006, while growth for the first quarter reached 7.46%, year on year. The government is looking for growth of around 8% this year.

Peru’s trade surplus continued to widen in March, figures from the Central Bank show. Exports in March exceeded imports by $665m, up from $473m in February, and 46% up on the same month last year ($455m). Total exports rose to $2.06bn, up 19% year on year, set against imports of $1.40 billion, 9% up on the same month last year. The March figures mean that the trade surplus for the first quarter was $1.42bn, compared with $1.25bn for the same period in 2006.

Peru’s ministry of finance said Wednesday that first-quarter growth is likely to come in at 7.2%, following estimated economic expansion of 5.3% in March. The second-quarter figures also look promising, according to MEF, with estimated increases of 7.5% and 6.1% in April and May, respectively.

Peru reopened its local 2020s bond issue to raise a total of 350m soles ($110.6m) in the local market on Tuesday, selling at a yield of 5.78%. Demand was heard at 550m soles. The sovereign had hoped to sell 280m soles ($88.5 million) but extended the sale in the face of the strong demand. Last month Peru raised 360m soles ($113m) from the tap of two of its local-currency bonds. The sovereign sold 270m soles in 2026s to yield 6.14% and 90m soles in 2046s to yield 3.25%. Demand for the paper was 448m soles and 274m soles, respectively. The government is authorized to sell up to 2.33bn soles of local-currency paper this year.

Peru manufacturing output rose 6.5% in March compared with the same month last year, according to figures published by the ministry of production (Produce) on Tuesday. Production was driven by the non-primary sector, which grew by 10.8%, against a contraction of 13.6% in the primary sector, with the largest drop seen in precious and non-ferrous metals (-21.3%).

Peru’s finance ministry announced on Monday that the sovereign is planning to reopen its local 2020 bonds to sell a further 280 million soles ($88.5 million). Last month Peru raised 360 million soles ($113 million) from the tap of two of its local-currency bonds. The sovereign sold 270 million soles in 2026s to yield 6.14% and 90 million soles in 2046s to yield 3.25%. Demand for the paper was 448 million soles and 274 million soles, respectively. The government is authorized to sell up to 2.33 billion soles of local-currency paper this year.

Anglo American, the mining giant, has bought the Michiquillay copper project from the Peruvian government for $403m. Payment will be made over the first five years of the project and half will be allocated to a trust fund for the development and benefit of local communities. Michiquillay is an advanced exploration project in Cajamarca State, which already hosts several mines. “Anglo American believes that there is significant additional exploration potential associated with this deposit,” says the acquirer. Anglo American is also developing the Quellaveco copper project, where a feasibility study is expected to be completed in the first half of 2008. “These two opportunities in Peru are complementary and underline Anglo American’s confidence in Peru and its mining industry,” says the UK-based miner.